Cherry v. Commissioner, Docket No. 11462-79.
| Decision Date | 30 September 1982 |
| Docket Number | Docket No. 11462-79. |
| Citation | 1982 TC Memo 579,44 TCM (CCH) 1316 |
| Parties | Philip Cherry and Ruth Cherry v. Commissioner |
| Court | U.S. Tax Court |
Richard B. Sherman and Arthur Pelikow, for the petitioners. Julius Jove, for the respondent.
Memorandum Findings of Fact and Opinion
Respondent determined a deficiency of $200 in petitioner's Federal income tax for the year 1976. After concessions by the parties the sole issue for our decision is whether petitioners are entitled to a home office deduction under section 280A, I.R.C. 1954.
Some of the facts have been stipulated and are so found. The stipulation of facts and exhibits attached thereto are incorporated herein by this reference.
Philip Cherry (petitioner) and Ruth Cherry, husband and wife, resided in New York City, New York at the time they filed their petition herein. Their Federal income tax return for 1976 was filed with the Brookhaven Service Center at Holtsville, New York.
During taxable year 1976, petitioner was a concert cellist with the Metropolitan Opera Association, Inc. (hereinafter Met) at Lincoln Center, New York City, New York. As of 1976, petitioner had been a concert cellist for approximately 30 years and had been with the Met for 15 of the 30 years.
Petitioner, as a member of the Metropolitan Opera Orchestra,1 was covered by the terms of union contracts between Local 802, American Federation of Musicians (of which petitioner was a member) and the Met. During 1976 he received compensation from the Met in the amount of $22,510.23. He was compensated by the Met for the following periods:
During the pre-season rehearsal period, the musicians would rehearse twice a day. The first rehearsal would begin at 10:30 a.m. and end at 1:15 p.m. and the second would begin at 2:00 p.m. and end at 4:45 p.m. This rehearsal schedule continued for 3 weeks, 5 days a week.
During the New York season, petitioner was required to perform five operatic performances per week. The running time for each performance could vary from 1 hour 36 minutes to 4 hours and 55 minutes. Almost all performances during the New York season began at 8:00 p.m. and, depending upon the opera, ended at around 11:00 p.m. Saturday performances began at about 2:00 p.m. There was no contractual requirement that the musicians arrive prior to the start of the performances. However, most did so as to "warm up or tune up." Performances consumed 15 to 16 hours per week. All New York City performances (other than those in the parks) were at Lincoln Center.
In addition to performing, during the New York season the orchestra musicians were required to rehearse together as a unit. As a member of the string section, petitioner was required to participate in these rehearsals at the Metropolitan Opera House at Lincoln Center approximately 10 or 11 hours per week. The orchestra rehearsals were either at a rehearsal room in C level or "in the pit," where performances took place. Thus, during the New York season a member of the string section would spend approximately 26 hours per week at the Met facility at Lincoln Center playing and rehearsing. In addition, the three weeks of pre-season rehearsals, also at Lincoln Center, consumed about 27½ hours per week.
During the 49 tour days in 1976, the Met orchestra performed in Boston, Cleveland, Savannah, Memphis, Dallas, Minneapolis and Detroit. While on tour, the musicians generally did not rehearse together as a unit. The orchestra performed at night only and during the day the musicians were free to spend their time as they wished.
Immediately following 2 weeks of performances in the park, the musicians received a 5-week paid vacation. During this period, the musicians were not obligated in any way to the Met and were again totally free to do as they wished, including accepting independent employment, without any effect on their compensation. This contrasted with the supplemental unemployment benefits period during which time if a musician worked independently, the suplemental unemployment benefits to be received as compensation would be reduced. During the summer of 1976, petitioner performed for a period of 20 days for Festival Casals, Inc. in San Juan, Puerto Rico, and received $1,242 for his services there as a concert cellist.
As a professional musician, petitioner was required to practice numerous hours in order to maintain, refine, and perfect his skill. Petitioner practices the opera in current production as well as the one in preparation. He would begin his individual practice with scales and warm-up exercises. He would spend considerable time on difficult technical passages, practicing those passages of the opera over and over. Practices at the Met were of the entire 93-piece orchestra, differing from a performance principally due to the absence of an audience. Petitioner's part had to be perfected prior to a rehearsal or performance, since every error can be detected by his colleagues and his conductor. An error can distract other members of the orchestra, and has the potential to disrupt the entire orchestra.
The Metropolitan Opera House at Lincoln Center does not have private studios for practice on an individual basis by the 93 members of the orchestra. Neither did the Met otherwise provide to petitioner a facility for private practice. Orchestra employees were expected to practice individually off the premises, which practice was necessary as a practical matter in order for petitioner to carry out his obligations to the Met. Such off-premises practice, while a practical necessity for the orchestra employees, was not requested by the employer and was not a requirement or condition of employment. The musicians (including petitioner) were not required to report to the Met on their practice at home. By contrast, missing a rehearsal or a performance was investigated and usually would result in a loss of pay unless there was a legitimate reason for the absence.
In the year in question, 1976, petitioner lived with his wife and two children in a seven room apartment in New York City.2 One room was set aside for his exclusive use as his studio. The room or studio was furnished with a desk, a chair, a stereo, recording equipment, and bookshelves holding hundreds of records and tapes and numerous books. The children were given strict orders to stay out of this room and, in addition to the aforementioned items, petitioner kept his cello there. The entire family viewed this room as a place solely for petitioner's business and neither social functions nor activities such as reading the paper or writing checks occurred there. Petitioner used the studio for approximately 31-33 hours per week while in New York and his work there included practice of his musical skills, review of musical scores, and rehearsal of his numeous operatic numbers.
Petitioner deducted $675 for "studio rent and maintenance" on the joint 1976 income tax return. This amount was computed by taking one seventh of the total of the apartment rent ($3,695), electricity costs ($241) and household maintenance ($800).
OpinionSection 280A limits the deductions for expenses in the home for taxable years beginning after December 31, 1975.3 Section 280A(a) provides generally that "no deduction * * * shall be allowed with respect to the use of a dwelling unit which is used by the taxpayer during the taxable year as a residence."4 Section 280A(c)(1), as recently amended, sets forth an exception to this general disallowance5 by providing that:
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